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Status of the Nation's Highways, Bridges, and Transit:
2002 Conditions and Performance Report

Executive Summary
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Index
Introduction
Highlights
Executive Summary
Part I: Description of Current System
Ch1: The Role of Highways and Transit
Ch2: System and Use Characteristics
Ch3: System Conditions
Ch4: Operational Performance
Ch5: Safety Performance
Ch6: Finance

Part II: Investment Performance Analyses
Ch7: Capital Investment Requirements
Ch8: Comparison of Spending and Investment Requirements
Ch9: Impacts of Investment
Ch10: Sensitivity Analysis

Part III: Bridges
Ch11: Federal Bridge Program Status of the Nation's Bridges

Part IV: Special Topics
Ch12: National Security
Ch13: Highway Transportation in Society
Ch14: The Importance of Public Transportation
Ch15: Macroeconomic Benefits of Highway Investment
Ch16: Pricing
Ch17: Transportation Asset Management
Ch18: Travel Model Improvement Program
Ch19: Air Quality
Ch20: Federal Safety Initiatives
Ch21: Operations Strategies
Ch22: Freight

Part V: Supplemental Analyses of System Components
Ch23: Interstate System
Ch24: National Highway System
Ch25: NHS Freight Connectors
Ch26: Highway-Rail Grade Crossings
Ch27: Transit Systems on Federal Lands

Appendices
Appendix A: Changes in Highway Investment Requirements Methodology
Appendix B: Bridge Investment/Performance Methodology
Appendix C: Transit Investment Condition and Investment Requirements Methodology
List of Contacts

Ch 10: Sensitivity Analysis

Highway and Bridge

The usefulness of any investment requirements analysis depends on the validity of the underlying assumptions used to develop the analysis. Since there may be a range of appropriate values for several of the model parameters used in these analyses, this report includes an analysis of the sensitivity of the estimated Cost to Maintain Highways and Bridges and Cost to Improve Highways and Bridges to changes in these assumptions.

Travel Forecasts
The Highway Economic Requirements System (HERS) assumes that the State-supplied baseline travel forecast for each highway section represents not what future travel will be, but what it would be if investment rose to the level required to keep highway user costs constant. The aggregate annual growth rate drawn from these section level forecasts is 2.08 percent. If instead, the 2.99 average annual VMT growth rate observed from 1980 to 2000 were a better predictor of future constant price VMT growth, then the estimated Cost to Maintain and Cost to Improve would each be over 50 percent higher. Conversely, if the "true" annual VMT growth that would occur at a constant level of service were only 1.17 percent, the Cost to Maintain and Cost to Improve would fall significantly.

2000 Capital Outlay vs Highway and Bridge Investment Requirements
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Impact of Other Alternate Assumptions on the Average Annual Cost to Improve Highways and Bridges
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Value of Time
The value of time in HERS was developed using a standard methodology adopted by the Department, but other values are used inside and outside the Federal government. Doubling the value of time would increase the Cost to Improve by 11.7 percent. Cutting it in half would reduce the Cost to Improve by 8.1 percent.

Construction Costs
If currently unforeseen circumstances were to cause future highway construction costs to unexpectedly rise by 25 percent in constant dollar terms, this would increase the Cost to Improve by 16.1 percent. The increased cost of individual projects would be partially offset in this scenario by some projects that would no longer be cost-beneficial.

Note: The impacts of alternative model parameters and procedures are more ambiguous for the Cost to Maintain, as many of these parameters are used in the calculation of baseline user costs. By changing these parameters, the target user cost level being maintained under the scenario is also changed.

Transit

This chapter examines the sensitivity of projected transit investment requirements to variations in the values of the following exogenously determined model inputs: passenger miles traveled (PMT), capital costs, and the value of time. These alternative projections illustrate how transit requirements will vary according to different assumptions on these input values.

Sensitivity to Changes in PMT
The Transit Economic Requirements Model (TERM) relies heavily on forecasts of PMT in large urbanized areas. These forecasts are primary factors behind TERM estimates of the investment necessary to expand the Nation's transit infrastructure to maintain and improve performance. Transit PMT forecasts are generally made by MPOs along with projections of vehicle miles traveled (VMT) for the regional transportation planning process and implicitly incorporate assumptions about the relative growth of transit and automobile travel. The average annual growth rate in PMT of 1.6 percent used in this report is a weighted average of the most recent (primarily 2001) MPO forecasts available from 33 metropolitan areas. (PMT increased at an average annual rate of 3.2 percent between 1993 and 2000.)

Varying the assumed rate of growth in PMT significantly affects estimated transit investment requirements. This effect is more pronounced under the Maintain Conditions and Performance scenario, as PMT growth rates influence asset expansion costs, which comprise a larger portion of total estimated Maintain Conditions and Performance needs. A 50 percent increase/decrease in growth will increase/decrease the cost to Maintain Conditions by 18 to 19 percent and the cost to Improve Conditions and Performance by 13 to 14 percent. Needs decrease significantly if PMT remains constant.

Growth on Transit Annual Investment Requirements (Billions of 2000 Dollars)
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Sensitivity to a 25 Percent Increase in Capital Costs
A 25 percent increase in costs increases the amount necessary to Maintain Conditions and Performance and to Improve Conditions and Performance by close to the full 25 percent. Total benefits continue to exceed total costs for most investments even this 25 percent increase.

Sensitivity to a Change in the Value of Time
The value of time is used to estimate the total benefits to transit users from transit investments that reduce passenger travel time. Variations in the value of time were found to have a limited effect on investment.
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